Transcript. Conference Call of NBCC Limited

Transcription

1 Page 1 Transcript Conference Call of NBCC Limited Presentation Session Event Date / Time : 17 th August 2015, 03:30 PM IST Event Duration : 54 min 07 sec Good afternoon ladies and gentlemen. I am Moumita, moderator for this conference call. Welcome to the NBCC Limited Q1 FY16 post results call hosted by IDBI Capital. At this moment, all participant lines are in the listen only mode. Later, we will conduct a question and answer session. At that time, if you have a question, please press * and 1 on your telephone keypad. Please note this conference is recorded. I would now like to hand over the floor to Mr. Rohit Natarajan from IDBI Capital; over to you Mr. Natarajan. Rohit Natarajan: Thank you Moumita. On behalf of IDBI Capital, I welcome you all to the Q1 FY16 post earnings call of National Buildings Construction Corporation. We thank the management once again for giving us the opportunity to host the call. Today we have with us Dr. Anoop Kumar Mittal, the Chairman and the Managing Director. I would now handover the call to Dr. Mittal for his opening remarks; over to you sir. Hello. Good afternoon everybody. This is regarding Q1 results. As you know, in this quarter, company has registered growth of 36% in top line. And profit before tax is 20% and PAT is 32%. And this quarter company has generated business of Rs.4500 crores. As of now our outstanding order book is about Rs crores to Rs crores. And this financial year we are targeting to achieve top line of Rs.6000 crores and bottom line also in the same ratio increase of say 20% to 25%. These are the few highlights in the last one quarter. Now, the session is open for question and answer. Question and Answer Session Thank you sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press * and 1 on your telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing * and 1 again. Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad. The first question comes from Mr. Sumeet from Silver Stallion. Please go ahead sir. Sumeet: Hi sir. Very good evening to you and your entire team. Sir, I wanted your thoughts, particularly on how do you basically see the order book shaping up. If I heard correctly, you just mentioned that we have an order of about; we have an

2 Page 2 order book of about crores to crores. Can you share your thoughts on the order pipeline? And how do you see the opportunity of smart cities coming up and how do you think that will benefit us sir? That is my first question. Please repeat your question, last few lines. Sumeet: Sir, my question was basically, how do you see order book shaping up? Currently we are at about crores to crores, so how does the order pipeline look? And secondly, for the smart cities, how do you basically see NBCC getting traction for the smart cities concept sir, smart cities projects? As far as your first question, part of this question is concerned, as I said our outstanding order book is about Rs crores to Rs crores, where our projects which we had not included in this order book of 26000, these are basically projects like DDA Karkardooma and Trilokpuri redevelopment projects or development projects with other agencies. And similarly, recently we had bagged one order from IIPA for development of their property in Delhi. So, there are few projects which we have got. But, we have not included these projects in our outstanding order book. And the only reason why we have not included them, because otherwise our order book will be around Rs.40000, but what we thought that once we start the work at ground, like we have started Kidwai Nagar, at that time we will include these orders in our order book. So, these are few orders, maybe Rs crores order which purposely we have not included. Otherwise there are few, sorry? Sumeet: Sorry sir, go on sir. Sorry. Otherwise there are few other redevelopment projects which are under negotiation with the Government of India. And very positive response we have got for development of three colonies in Delhi and printing press in Minto Road in Delhi. So, I am hopeful that by the end of this calendar year, by November-December, these projects will be through, because we had two rounds of discussion with Ministry of Urban Development and as well as the Ministry of Finance. And there are other PMC jobs which are in negotiations with different clients. And in first quarter we got, as I said 4500 crores order. So, similar order inflow I am expecting in this quarter also. So, without considering redevelopment projects and DDA projects, I am hoping that our order book should close Rs crores to Rs crores as of 1 st April So, there will be increase of say, Rs crores to Rs crores order book after, doing 6000 crores work in this financial year. And as far as the smart cities are concerned, we have signed an MoU with IBM and other companies also from abroad. And we are quite hopeful that NBCC will get substantial amount of order in smart city projects. Sumeet: Understand. So sir, I just wanted to understand this again, so you said that if you included the projects of DDA and couple of other projects, the order book should go to and the redevelopment projects, there are three of them which are lying with the Government, so that is additional. So, if we include everything, then the order book can go to about crores. Am I right sir? Is my understanding correct? Absolutely correct. Absolutely.

3 Page 3 Sumeet: future sir. Okay. Perfect sir. I wish you all the best for a fantastic Thank you. Thank you. Thank you sir. Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad. Sir, we have our next question from Mr. Deep Master from Enam Holdings. Please go ahead sir. Hi sir. I wanted to know the breakup between your different business segments in this quarter. Hello? Sir, can you hear me? Yeah, I can hear you. I wanted basically the breakup sir, as in why the margins were under pressure this quarter? saying this? Margins are under pressure in this quarter? Why you are On a quarter on quarter basis, they came in quite much lower than last year, despite us talking about the redevelopment being at a higher margin and even PMC. In this quarter we have registered almost 36% growth in top line. And PAT is about 30% more than last year PAT. So, I couldn t understand your question. Sir, despite having such strong top line growth, why didn t we see any margin improvement? Margin has improved by 30%. PAT has increased by 30%. Your margins are about 3½%.. Sorry? Your margins are lower than last year. So, just trying to understand why your EBITDA didn t grow in line with your sales. PAT of Rs crores. This quarter our PAT was Rs.44 crores against last year Correct. I am talking about EBITDA, before other income.

4 Page 4 Before? Before other income. Basic reason of that which you are talking is, booking of some overheads in this quarter, which is supposed to be booked in whole year, so that is because of that. Otherwise, margins have increased. overhead? Management: Management: Right. So, can you tell us what that quantum was of the Quarter overhead was 14 crores. How much? Sorry? (Inaudible) as compared to (inaudible). Sir, you are not audible, I can t hear. Hello? Can you hear me? Yeah, now I can hear you. One second. This quarter overheads are about Rs.80 crores against last year s Rs.60 crores. So, there is a component of Rs.14 crores which is against post retirement medical benefit which we have not included last year. So, this quarter we have taken that in our overhead. So, this is a onetime expenditure. Next quarter onwards it will give you much better position. That is the only difference. That you know you put in your press release. But, that is the main difference you are talking about. Main difference. Okay. Sir, where do you see the margins going now? On a full year basis, do you think you can again start touching your 7½%-8% mark? Yes, yes, definitely. It should increase at least by 1%. It should be in the range of 7% to 8%. For the full year? For the full year. But, this is including other income, right? Including other income. Deep sir? Yeah.

5 Page 5 Sorry to interrupt sir. But, if you could just remove your phone from the speaker mode, because there is a slight echo coming in. Sorry. Sir, this is including other income, right, 7% to 8%? Thank you. Yes, yes. Okay. That is all from me. I will come back in the queue. Thank you. Thank you sir. Sir, we have the next question from Mr. Siddharth Bhattacharya from Suyash Advisors. Please go ahead sir. Siddharth Bhattacharya: Hello. Good afternoon sir. Good afternoon. Siddharth Bhattacharya: Sir, in your PMC division, I just wanted to understand, in terms of when you are getting new orders from all these Government bodies, autonomous bodies and State Government bodies, are we seeing some pressure in terms of them negotiating harder compared to a year or so back? Because, I am seeing that the segmental EBIT margins are under pressure for the last six or seven quarters, so just wanted to understand that aspect? Which segment you are talking? Siddharth Bhattacharya: The PMC, our main segment. No, it is not, there is hardly any change in negotiations or margins with clients. The average is same, what we were getting last quarter or last year. There is hardly any change. Siddharth Bhattacharya: Okay, because Q1 last year, our EBIT margins were around 6.3%, which are now close to 5.1%. So, just wanted to understand? For the whole quarter, for all segments? Siddharth Bhattacharya: No, no, just for PMC I am talking about. We have done 6.3% EBIT margins in the PMC segment in Q1 FY15. I don t think there is any change in pricing or fee structure with our clients. But, sometimes you see what happens; it is very difficult to calculate quarterly margins in a proper way. But, otherwise you will see at the end of the year, it will be almost same or even better than that. But, when we do more work and the margins will increase, because your fixed overheads are the same. Siddharth Bhattacharya: Okay. So, you are saying by the end of the year this should average out to the numbers that we have seen in the earlier years?

6 Page 6 It is very difficult to justify in a single quarter or three months figure. But, ultimately you will see that at the end of the year it will be same. Siddharth Bhattacharya: Okay. Thank you so much sir. Thank you. Thank you sir. Sir, we have the next question from Mr. Karthick Gada from Val-Q Investment Advisory. Please go ahead sir. Karthick Gada: Thanks for the opportunity. Am I audible? Karthick Gada: Sir, you just mentioned in one of the previous questions about signing an MoU with IBM and other such companies. Would it be possible for you to elaborate on this, anything at this point of time? We have signed an agreement, an MoU with IBM. And there are two more companies, one from Korea and one is, another is from I think it is from Malaysia. So, the MoU is (not clear) that both of these companies NBCC as well as either IBM or company from Korea will work together for the development of the smart cities. And we both will quote, bid for smart cities across the country. So, with the sense of these specialized companies like IBM and Korean company, I think NBCC has fair chance and particularly being a public sector company, to get orders from different State Governments for development of their smart cities. The only thing is, still the State Governments are not very clear about their policies and identification of their cities. They are still churning out and are deciding that which city should be smart city. So, I think things will clear after six months to nine months time. It will take some more time. Karthick Gada: Okay. So, these MoUs, they are strictly for joint work related to smart cities, or we can extend work even otherwise, outside of the smart city projects? Karthick Gada: At present, these MoUs are for only smart cities. Okay sir. Thank you and all the best. Thank you. Thank you. Thank you sir. Sir, the next question comes from Mr. Danesh Mistry from Tata Asset Management. Please go ahead sir. Danesh Mistry: Hello sir, hi. Good afternoon. Thanks for talking to us and congratulations on a good set of numbers. Just wanted to have, just to get some clarity on this DDA project that you have spoken about, is it the Karkardooma one? There are two projects in Delhi which we are doing for DDA. One is Karkardooma, which is about 6000 crores and another is project for DDA that is the development, Lake View development, Sanjay Lake View development that is in

7 Page 7 Trilokpuri. So, there are two projects. And the second one is about Rs.2000 crores construction development. Okay. Because, you mentioned that, so both these two projects, so in terms of the Karkardooma one, have we started work or when do we plan to start works on this? Danesh Mistry: In both these projects, we have started doing the engineering work. And we are in the process of selecting architect and engineering companies also, especially design. Work you can say has started, but not revenue booking has not started. It will take another four to six months time. Okay. Understood sir, understood. And in terms of the smart cities and all sir, what would we be doing? I understand that we are a construction company, therefore we are looking at just the building part or when you say smart cities, it would mean a lot of other things also? So, just some clarity on that, sir, what would be our mandate in that? Danesh Mistry: Once we go for the smart cities implementation that will be construction as well as doing Technical Park also. It means electronic parks, software parks, everything, total solutions for the smart city. That is why we have signed an agreement with IBM and (not clear) from Korea. Understood. Sir, just to put it simply that today for example NBCC along with IBM can bid for a smart city and handle the whole thing, whether it is building roads and everything? Danesh Mistry: much. That s right. That s right. Okay sir. Alright. Thank you so much. Thank you very Thank you sir. Sir, our next question comes from Mr. Rajendra Mishra from IDFC. Please go ahead sir. Rajendra Mishra: Hello sir. Congratulations on a good set of numbers. Thank you. Rajendra Mishra: Sir, again building on the previous question, just wanted to understand, when we say we will be taking up smart projects Can you speak loudly? You are not audible properly. Rajendra Mishra: Yeah. I am saying that building on the previous question, when we say NBCC will participate in smart city projects, if you can just elaborate more on the scope of work that will be taken and what kind of deliverables will be there? If you can give some more dope as to what kind of work will be there, what is the scope of work and what kind of economics will be involved?

8 Page 8 In smart cities, primarily there are two or three types of work. One will be construction related work that is creating the infrastructure. Second one will be the electronic park, or the IT parks. Of course that will be with the software also. So, these cities have city Government, municipal corporations may ask bid for, or together construction as well as IT parks or separately. So, what we are doing that after signing agreement with them, IBM and other companies, we will bid for entire solution for smart cities. So, as far as the revenue and other things are concerned, it is not very clear, because it will take some more time, because you see after identification of these cities, first, DPR will be made, engineering parts and detailing will be done, either by municipal corporations or that work also they can give to NBCC and companies, other companies. So, then only you can, or I can understand how much revenue will come from these smart cities. Rajendra Mishra: Okay, understood. So, you are basically saying that, it is quite early to get into details? Rajendra Mishra: But, any initial one-two cities which could be coming up in the next six to twelve months or eighteen months, which you think is possible or you think it is little more into the future? Rajendra Mishra: We have to wait some more time. Okay. Thank you sir. Thank you. Thank you sir. Sir, we have the next question from Mr. Rita from Edelweiss Securities. Please go ahead. Rita: Hello sir. Congratulations on a good set of numbers. Sir, I had one question. What is the breakup of the order book? Rita: Sorry? Breakup of order book among different businesses? (inaudible) total order book. Out of this, 2000 crores approximately will be from real estate construction side. And Rs.700 crores to Rs.800 crores is from EPC contracts and the remaining is PMC. Of course that includes the redevelopment projects of Kidwai Nagar also. Primarily PMC is including Kidwai Nagar is about Rs.4000 crores and the rest Rs.3000 crores is either from real estate or (inaudible). Rita: quarter it was 4200, right? Rita: So, from the redevelopment part I assume was, the last Right. So, this quarter how much is it?

9 Page 9 I think we have done about Rs.300 crores work in first quarter from Kidwai Nagar. Rita: Rita: current year? 300. Rita: expected for FY16? 300 crores? Yeah. Okay. And the order inflow, how much do we expect for the Current year, Kidwai Nagar we have done Rs.200 crores, not 200 crores, okay. And how much is the order inflow Order inflow is expected about Rs crores to Rs crores in this financial year, minimum figure I am giving you. This is very conservative. Rita: Including the redevelopment project? Without the redevelopment project. Without the redevelopment project. Rita: Thank you. That is it from my end. Thank you. Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad. Sir, one next question comes from Mr. Dixit Doshi from White Stone Financial Advisors. Please go ahead. Hello. Good evening sir. Congrats for the good numbers. Sir, I have a question, like in the two projects which you have mentioned for the DDA, so in those projects we will sell it to anybody or it will be for the Government organizations or PSUs only? This DDA property will be for everybody. It is open for public, retail or in bulk. But, it will be open for everyone. Okay. So, just even we were planning that for the next three redevelopment properties also, we are pitching for, to allow us to sell to everybody and not only for the PSUs. So, going forward, do you feel that, the NCR or the Delhi region have so much of demand that we will be supplying like three redevelopment properties, then these DDA properties? In Delhi, if I say about these three colonies, they are located at very prime locations, best locations of Delhi, near Chanakya Puri area, which is the most prime area in Delhi. So, the demand in this particular area will always will be very high. So, there will be no problem for selling of these properties. So, potential of the real estate business, if I am not wrong, you are asking this question, so potential is very

10 Page 10 good and people will be very much excited buying properties in three colonies area that is in Chanakya Puri. And as far as the Karkardooma DDA project is concerned, this is also in a very good location. And you see in Delhi, there is hardly any development from Government side for masses. Otherwise whatever stock is being created, that is in the NCR area, Noida and Gurgaon. But, in Delhi there is hardly any development. There will be huge sale of these properties. Okay. And in our real estate division, this quarter we have done very good. So, how do you see going forward in the remaining next three quarters of the year, for our real estate division? And also in the last conference call you have mentioned that some of the State Governments have delayed their purchases of real estate only because of not having them much allocations, so how do you see those things now? I am hoping in the next three quarters or so, we will get similar kind of response in the real estate. And if you see in this quarter, first quarter, whatever you are seeing, the sale has been done, that is because some of the public sector and State Governments has purchased our property, that is after approval of their budget. So, this trend will continue in the next three quarters also. Rs.300 crores. Okay. And how much inventory is left at Okhla now? Okhla, inventory I think the balance is about Rs.250 crores to Okay. So, are we planning to just doing some correction in the price and selling it out or any thoughts on that? Not at all. No. No way. No way. No way, okay. And just last one question, can you give some update on our JV with Air India, any development or any project finalized or any business model finalized, whether it will be a project sharing or a square feet sharing or just the fees? If I say bottom line is, there is no concrete proposal has been approved with Air India. But, we are in discussion with them for quite number of proposals in Delhi as well as Bombay. So, I am not sure when these will be matured. But, let us see about that. Okay. And just last question, you have mentioned that you are expecting these three colonies approval and also the post office approval and also the post office approval, redevelopment approvals by end of this calendar year; so, after once you get the approval, how much time it will take to start the construction? side. Minimum nine months time. Nine months time, okay thank you sir. That is it from my

11 Page 11 Thank you sir. Sir, our next question comes from Mr. Naveen Jain from JM Financial. Please go ahead sir. Good afternoon sir. Sir, my first question was on the order pipeline that you mentioned about crores to crores kind of order inflow you expect for the year, ex of redevelopment projects. Can you speak loudly? Hello? Is it better now sir? Little better. Sir, actually I wanted to ask about the order inflow pipeline. You mentioned that you expect crores to crores kind of inflow for the year, ex of redevelopment projects. Can you please help us understand which are the segments where you are, which are the kind of projects that you sort of Your voice is cracking. One second sir. Hello, is it better now sir? Yeah, it is better now. Sir, I was asking about the crores to crores order inflow that you expect for the year, ex of redevelopment projects. Can you please help us understand what are the kinds of projects which are in pipeline, which segments they are from? I said, we are expecting crores crores order from different clients in PMC and EPC contracts, other than redevelopment projects. These will be primarily from different PSUs like Coal India, different State Government like Orissa, Rajasthan, West Bengal and some of the institutions like IITs, medical colleges. So, this is mixed client. It is not one or two clients, because if we get crores order, so there will be twenty-thirty clients. Sure. Fair enough. Secondly sir, the Kidwai Nagar project execution, is it, last quarter we had about 200 crores of revenue booking you mentioned. So, was it as per plan or is it moving slower than expected currently? Again, now your voice is not clear. Hello? Sir, I was asking about Kidwai Nagar project, last quarter you executed 200 crores worth from that project. So, was it as per expectation or was it slightly slower than the expectation?

12 Page 12 90% you can say we have achieved. There are reasons; the first quarter is always lighter than the second and the third quarter. So, it will improve in the next three quarters. Sure. And finally sir, we had this fund raising plan, so any update on that, when one can expect? No, immediate plans for that. Okay. But, the plan remains, right? Hello? But, the plan remains, for some time in the near future? Maybe. Maybe. Okay sir. Sure. Thank you. Thank you. Thank you sir. Sir, we have the next question from Mr. Deep Master from Enam Holdings. Please go ahead sir. Hi sir just wanted to check on the order book, just wanted to make sure that I got the right numbers. So, your current order book ex of redevelopment is, you said crores? crores more? crores and this would and the redevelopment would be about Yes, redevelopment, DDA and other projects are almost crores to crores. So, of that DDA itself would be crores, right? Okay. And including execution of 6000 crores in the year, you expect to close at crores to crores, correct? Plus, another crores to crores. Correct, correct. So, you will close at about crores? Maybe, maybe. After 6000 crores of execution, right?

13 Page 13 expect to start presales? February. Correct. Okay. Sir, just on the Karkardooma project, when do you Presales? Sorry, presales? Yeah. Like, when do you expect to launch it? Last quarter of this financial year, sometimes in January- Okay, because as I understand, now redevelopment will be different from PMC, in that you would have a float, correct? Correct. So, you would be relying on sales to fund the project? Right. And the only, the money to start the construction will basically come from the equity that you put in? Yes, that s right. Okay sir. So, in terms of the Kidwai Nagar, do you have stock left or it is all sold out? Nothing. Nothing. And would Karkardooma be similar to Kidwai Nagar, in that you would be selling to more of the PSUs or you are going to have a different model there? It will be open for public masses, for retail sales. Okay. And what do you expect to sell at? About Rs crores minimum. You are saying crores of project sales over the life. But, what rate would you sell at per square foot? That we have not decided yet, but that area per square feet rate is in the range of Rs to Rs per square feet.

14 Page 14 come at lower rates? But, then would you come at market rates or would you Market rates. Okay. Fair enough. That is all from me. Thank you. Thank you. Thank you sir. Sir, our next question comes from Mr. Sumeet from Silver Stallion. Please go ahead sir. Sumeet: Hi sir. I just wanted to ask you, what is our cash today we have on the balance sheet? And sir, secondly, of the real estate what we have today, if you look at the market value, it should be valued today at about 5000 crores, right sir? Sumeet: Sumeet: Correct. Okay. And what is the cash on the balance sheet sir today? Cash on balance sheet, one second crores. I am sorry sir? Rs.1000 crores. Sumeet: Okay. And sir, just one thing, all the while the rumors keep coming up and the stakes and all that has the Government communicated anything to you on this stake sale or the Government has not communicated anything to you sir? Sumeet: Sumeet: you. Government has not communicated anything. So, this is all basically all market rumors, speculations? Okay, that is helpful sir. Thank you very much sir. Thank Thank you sir. Sir, we have the next question from Mr. Akilesh Kumar. He is an Individual Investor. Please go ahead sir. Akilesh Kumar: Hi Mr. Mittal. I have just one query, like we have three redevelopment projects coming up for approval by Cabinet, when do you expect that? Please speak little loudly; I am not able to hear you. Akilesh Kumar: Okay. The three redevelopment projects which are awaiting for Cabinet approval, when do you expect that to happen?

15 Page 15 Redevelopment has three colonies which we are talking. We are hoping that by end of this calendar year, we will get approval from Government. And it will take another nine months time to start the round. Akilesh Kumar: Okay. So, any particular reason for the delay, because it has been lying there for a long time, right? In Government it takes time and when you are particularly redeveloping existing colonies where people are living, so it takes time, because there are number of Ministries and departments are involved for giving the approval. So, it generally takes this much of time. Akilesh Kumar: Okay. And then the last thing, are we linking our FPO to that work to come by, because it is there where we require huge amount of capital? Akilesh Kumar: for the right time, right? No, not at all. Okay. So, FPO just we have approved and we are waiting Government has not yet asked us to go for FPO. So, there are no immediate plans on that. Akilesh Kumar: Okay. That is it. Thank you. Thank you sir. Sir, we have the next question from Mr. Danesh Mistry from Tata Asset Management. Please go ahead sir. Danesh Mistry: Just a follow up on Karkardooma, if you can just run us through the model as to how it is working on for you. So, one is that, you had mentioned that the project cost is 6000 crores and then also the total realization will be 10000, because you will be taking on the inventory. So, how is it? Is it that the DDA and you will share it equally or some kind of color on that would be very helpful for us? NBCCs role is as project management consultant for DDA, so NBCC will get agency charges, say 10% on construction cost, that is Rs.6000 crores and we will get certain percentage 1% as marketing charges. Danesh Mistry: How much sir? 1%? 1%. Sale of property, maybe crores or more than that. And the profit, the profit after this will go to Government, to DDA. Danesh Mistry: Okay. So, there is no inventory risk that you are running? Today for example if you are selling it to third party, if you are not able to sell it also, your only 1% is at risk, correct? Yes, correct. Danesh Mistry: Okay sir. And sir, one more question sir, earlier there was some talk of some Delhi railway station and all that. Any progress on that?

16 Page 16 Not really. But, still we are working out and we are making master plan and DPR for that. But, we have not heard anything from Government yet let us wait. Danesh Mistry: Alright sir. Thank you so much sir. Thank you. Thank you sir. Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad. Sir, our next question comes from Mr. Deep Master from Enam Holdings. Please go ahead. Sir, just a follow up question in Karkardooma. So, hypothetically in any of the redevelopment projects, if sales are lacking, then the project execution itself will stop? No, no. So, how will that be funded? The land equity, you can consider free of cost in these projects, because land is already available there. So, if the sale value is Rs crores, the construction cost will be say, in the range of Rs.3000 crores to Rs.5000 crores. So, there is hardly any chance that the inventory of 25% value is not sold. So, I don t see any chance in redevelopment project, where money is the problem. Okay. So, you will be launching it also at Rs only and not at a lower and then start scaling it up? Yes, even more than that. Okay. And what is the average construction cost we should estimate for your redevelopment projects? About Rs.3000 crores to Rs.3500 crores altogether. Altogether? Meaning for Karkardooma itself? So, would that be like Rs.1000 a square foot? Rs Rs.3500 crores?

17 Page 17 Rs.3500 per square feet. Per square foot, Rs.3500? Okay. For redevelopment? Okay. And sir, in terms of the inventory on real estate side, how much inventory do we have now? From real estate side, ready to be available inventory is about Rs.500 crores. But, the total inventory would be Rs.5000 crores, if we consider the entire real estate property. And how much will we have to spend for that? Sorry? In order to realize 5000 crores of sales, to finish your inventory, how much do you have to spend? cost? five-thirty places. Rs.1800 crores. 1800, incremental? Right. And sir, this 500 crores, is that market value or at At the present value. Okay. And how much land would we be having right now? 170 acres. This is all at Okhla? No, no. In the entire country, different locations of twenty Okay. And sir, any updates on, we have a redevelopment opportunity in Bhubaneswar and Rajasthan, so any updates on that? Yes, we have submitted few DPR to Government of Rajasthan and Orissa. So, we are expecting approval from State Government in the next two to three months for at least one project at each location, each State.

18 Page 18 about Rs.1000 crores. And what ticket size would this be? Rajasthan, first project is about Rs.600 crores and Orissa is And again this would be redevelopment? Redevelopment. And sir, one question that I come to now is in terms of the execution. With such a big order book, our executions will have to really pickup in the coming years, so could you give us any guidance for the next two or three years, in terms of maybe growth or how much execution you expect to do, say next year? This year we are targeting, we are hoping that we will do Rs.6000 crores and register about 30% growth, from last year. So, our next five years plan is to achieve at least 25% CAGR in the top line. So, accordingly the bottom line will also improve. 25%? Absolutely. So, execution you expect to keep improving at But, looking at your order book, I would expect you to have to grow faster than that even. In the next conference call, say first quarter of the next year, I may increase this figure of 25% to 35% or 40%. But, at present whatever orders we have in our pocket, so that is why I am saying 25%. Let us wait for redevelopment of three colonies and other projects; this will definitely be (not clear). Sure. I understand. Thank you. Thank you sir. Sir, we have the next question from Mr. Akilesh Kumar. He is an Individual Investor. Please go ahead sir. Akilesh Kumar: Sir, I wanted to know just one more thing, regarding WAGF properties, what we have taken in Bangalore, what is the status there? We are making progress there? Yes, we have prepared the plans and DPR and it is almost on final stage. From the owner side, they are likely to approve in this month. And from next month onwards something will be there on the ground. Mr. Kumar, your voice is breaking sir. Sir, I think we have lost him. We will move to the next question. Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad.

19 Page 19 Ladies and gentlemen, if you have any questions, please press * and 1 on your telephone keypad. Sir, our next question comes from Mr. Mayur Parkaria from Wealth Managers. Please go ahead sir. Mayur Parkaria: Sir, out of crores order book of PMC, how much would be redevelopment currently? It is about outstanding order from the redevelopment side will be approximately Rs.3500 crores. And this is primarily from East Kidwai Nagar. Mayur Parkaria: Right. If we exclude this Rs.3500 crores, which is around crores, what kind of margin do we see on the core PMC business? If we leave this Rs.3500 crores, crores will be traditional PMC business. The average margin will be about 9%. Mayur Parkaria: Do you believe we will be able to realize 9%? When we are saying 9% margin means, this is 9% average agency charges, fee we get from clients. So, out of that 9%, we have some expenditure on supervision, we have expenditure on planning and designing. So, ultimately we get net 6% or somewhere that as our profit margin. Mayur Parkaria: So, our EBIT margin on this will be around 6%? Correct. And there is some indirect income also from these projects of PMC that is what deposit we get from these clients. We earn certain amount of interest also. So, that also comes as indirect income of profit from these projects. Mayur Parkaria: Right. And sir, on the redevelopment project, I just wanted some clarification. You said the project cost is 6000 crores? Mayur Parkaria: Which one? Karkardooma. Karkardooma DDA, yes. Mayur Parkaria: 6000 crores. And the realizable value of the total is crores? Minimum crores as on date figure. But, it will increase once we will start selling the property. Mayur Parkaria: 1 crore square feet. So, what is the total area which is saleable? The total area is approximately one, ten million square feet,

20 Page 20 Mayur Parkaria: (inaudible)? And you are expecting around Rs and hence it is Minimum Rs.10000, but this will be more in some cases when you are selling commercial or institutional property. And is residential property. Mayur Parkaria: commercial would be? Okay, 10 million is, so 10 million is total and residential and That we are working out. It may be 70% or 30%. Broadly 1 crore square feet total area and average rate we have taken Rs crores, because it hardly matters for company, because we are getting only 1% marketing fee. If it is crores sale, so we will get Rs.100 crores as agency charges. If it is Rs crores, we will get Rs.120 crores. So, it will hardly matter that at what rate we are selling this. Mayur Parkaria: charges, right? Mayur Parkaria: So, on this we will get 10% on the construction cost as PMC Yes, absolutely. And 1% as marketing margin on the sale? Mayur Parkaria: Now the amount which the project cost of 6000 crores, which we will have to incur, how will we fund that? We are not going to fund this project, except some seed money initially, maybe in the range of Rs.200 crores to Rs.300 crores. But, immediately once the drawings are approved, we will start selling the property. So, we will start booking the property and money will inflow for the construction of the project. And similar model we have adopted in Kidwai Nagar and there our experience is, we have collected almost Rs.3000 crores, even before start of the actual work. Mayur Parkaria: Mayur Parkaria: So, you don t plan to take any debt on both the projects? No way, no. Okay. Thank you sir. That answers my questions. Thanks. Thank you sir. Sir, the next question comes from Mr. Dixit Doshi from White Stone Financial Advisors. Please go ahead sir. Hello. Sir, since we do almost the entire work is outsourced, so can you give us the number of developers we have, construction guys? We don t engage developer. We engage contractors. Yeah, number of contractors?

21 Page 21 We may be having 200 contractors at different places. Okay. And how much the top ten contractors would be contributing in terms of work? 60%. 60%. So, just for the execution side, do we have.can we scale up the operation in terms of, those ten, fifteen, twenty companies, top contractors, do they have the balance sheet strength also to execute such large projects, because our order book has been increasing very fast? Yes, yes, why not? Okay and just one question about the order book, so do we target in the initial, in the starting of the year that this much X percentage of the opening order book should be executed during the year or something like that in the past? What you are trying to (not clear)? Like, in the starting of the year we have an order book of around let s say crores and we are planning for something like 6000 crores of sale. So, we are planning almost 30% of the order book to be executed during the year. So, going forward let s say in couple of years time, once you get all the approvals from the redevelopment projects and also the Air India or many other joint development projects, so the 30% of the order book execution, is this rate sustainable or since our order book is growing much faster, the execution percentage might come down? I am not able to understand what you are asking. We engage contractors depending upon the value of the project. There are number of contractors available in the country, domestic contractors like Shapoorji Pallonji, L&T, Nagarjuna, blah blah. There are number of projects. There is no dearth of contractors in the country. We have around 300 projects in NBCC, the value in Rs.10 crores to Rs.1000 crores or maybe Rs.5000 crores. So, these projects are being executed by different contractors and different values. So, there is no issue on this. No, my question is related to like, since we have let s say order book of crores and we are targeting 6000 crores of sales. So, we are targeting around 30% of the opening order book to be executed during the year. No, no, this crores is project management consultancy projects, where clients pay. They pay us the amount for construction. So, these are not redevelopment projects. These are not projects where revenue has to be generated from the project. There is only one project which we are doing on self revenue generation, which we call redevelopment and that is Kidwai Nagar. Similar model, there will be another project DDA. Once we will start Rs.6000 crores, there will be five-six contractors of different range, Rs.500 crores to Rs.600 crores to Rs.1000 crores. And initially we need for Rs.6000 crores, we need around Rs.500 crores to Rs.1000 crores in first year, that we will generate out of that Rs crores sale.

22 Page 22 Naveen Jain. ahead sir. Okay. Thank you. Thank you sir. Sir, our next question comes from Mr. How much more time you will take? I have another meeting. Sir, this is the last question. Sir, it is from Mr. Naveen Jain from JM Financial. Please go Sir, thanks for the follow up opportunity. Am I audible? Yes, you are audible. Sir, just wanted to ask about the subsidiary that we have formed in Gulf, Oman called NBCC Gulf. So, are there any projects immediately visible in that subsidiary, in the near term? I can t tell you right now, unless we get the projects. There are number of projects for which we are trying through negotiations as well as we are bidding also. So, since now company has been formed, so we are hoping that some projects will start. Sure. Sir, another thing is, just one small clarification actually. So, what was our order backlog at the beginning of the year, this financial year? thousand odd crores..? Rs crores-rs crores. Okay. So, we have booked roughly 7 odd thousand, 7 to 7½ We have booked almost Rs.5000 crores order, which is first quarter. So, now our outstanding order book is Rs crores. After doing Rs.1000 crores, there will be variation of Rs.500 crores to Rs.700 crores. Approximately the order book in the beginning of the year was Rs crores to Rs crores. the first quarter? Okay. So, we have not booked any redevelopment project in No, we have not booked any redevelopment project. Sure sir, sure. Okay. Thanks a lot. Thank you sir. Thank you. It is over?

23 Page 23 Yes sir. Thank you so much sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Door Sabha s conference call service. You may disconnect your lines now. Thank you and have a good evening everyone. Note: 1.This document has been edited to improve readability. 2. Blanks in this transcript represent inaudible or incomprehensible words.